13 February 2013

Some industrial property developers
have been taken to task by the authorities for misusing space in industrial
buildings that they developed.

At least two developers have been
asked to cease the unauthorised use of industrial space as office space, The
Straits Times understands.

Those rapped by the Urban
Redevelopment Authority (URA) include Midview Development and Sin Soon Lee
Realty. Both set up their office in a strata industrial building they
developed.

Industry sources said this practice
was not uncommon among small firms, including industrial developers. However,
it goes against a URA "60-40" rule which effectively forbids the use
of industrial units as pure offices.

The rule stipulates that each strata
unit in an industrial development must devote at least 60 per cent of the total
floor area to core industrial activities such as manufacturing, assembly and
repair workshops or warehouse and storage facilities. The other 40 per cent may
be used for supporting purposes such as ancillary offices, staff canteens and
showrooms.

This is meant to ensure that
industrial land is used predominantly for industrial activities.

Midview Development has already moved
its office out of its 60-year leasehold light industrial development Midview
Building, which is located in Bukit Batok.

Analysts said that in many industrial
buildings, particularly those zoned "Business 1" (B1) which indicates
light industrial use, it was quite likely that at least 30 per cent of tenants
did not meet the "60-40" rule.

Several other industrial tenants have
recently been caught flouting the industrial usage rule.

These projects include The Alexcier
in Alexandra Road, First Centre in Serangoon North, Midview City in Sin Ming
Lane, 34 Boon Leat Terrace and One Pemimpin in Pemimpin Drive.

URA added that users of the units had
been given a "reasonable but definitive timeframe to cease the
unauthorised uses".

"Apart from the more recent
cases that are still under investigation or appeal, the rest of the
unauthorised uses have since ceased," she said. Users can be charged with
failing to comply with the "60-40" rule, and may face a fine of up to
$200,000 or up to 12 months' jail, or both.